TFA Sees BHPH Dealers as Growing Source of Consistent Repo Work

Earlier this year, Time Finance Adjusters conducted its annual convention at the same place and city as the National Alliance of Buy-Here, Pay-Here Dealers Conference.

That development wasn’t just a coincidence. TFA executive director Ron Brown explained why.

“These buy-here, pay-heres have become very legitimate,” Brown insisted to Auto Remarketing. “They’re very big. Most of them are owned by major dealerships. They’re not the little mom-and-pop car lots they used to be that dealt out of their hip pocket. That’s become a very good source of business.”

Brown shared that connecting with lot managers who were in Las Vegas for NABD 2011 blossomed into “great” work. Like several other repossessors in town, Brown said he secured assignments measuring in the hundreds and for rates necessary to stay ahead of expenses.

“The BHPH market is tremendous right now. That’s where the majority of cars are being sold now,” Brown declared.

The TFA executive elaborated on why the relationship between reputable repo agents and BHPH dealers should be strong.

“To exist in today’s society, you’ve got to have food, you’ve got to have shelter and the third thing is transportation,” Brown explained. “Transportation used to be at the bottom of the list. People used to say, they’re going to eat, they’re going to make their house payment and then they’re going to make their car payment. Now it’s a little different.

“They realized two or three years ago, maybe even a year ago, they were able to go to a bank and borrow at a decent rate even though they had a low credit score,” he continued. “Now if that vehicle is repossessed, they know they’re not going to be able to get that low interest rate. They’re going to have to go to a subprime, buy-here, pay-here group, and they’re going to pay higher interest. It has increased the importance of making the payment on that vehicle.”

And if the payments stop coming in, Brown is confident agents such as TFA members are ready to recover the vehicle so the BHPH store can possibly retail it again.

Contained within its Used Car Report — Mid-Year Edition, Manheim determined BHPH dealers typically retail out about 60 to 80 percent of the vehicles they repossess.

Brown expects TFA members will again be connecting with BHPH stores later this year. The East Coast NABD Conference is set for November in Atlanta.

“We’ve come with some innovative marketing to reach buy-here, pay-here,” Brown emphasized. “We are all looking for an upturn in the industry. Everybody is looking for ways to make money.”

More State-Level Regulation Ahead?

As of now, only two states require repo agents to hold a license — Florida and California. Illinois could be next.

Earlier this year, both chambers of Illinois’ General Assembly passed the Collateral Recovery Act requiring repossessors to be licensed, among many other requirements. The legislation still has not been signed by Gov. Pat Quinn. A spokesperson for the governor told Auto Remarketing that Quinn has until Aug. 26 to sign or veto the measure.

Brown believes state-wide regulation of repossessors can only work in highly populated states such as California, Florida, Illinois and New York.